IMF: The Big Bad Wolf

IMF: The Big Bad Wolf 

By: Michael O. Folorunso
michaelf01@msn.com 

 In the period during the civil war (1967 - 1970), what most people did not know was that the war was fought and not a single penny was borrowed from anyone or anywhere. But then, right after the civil war the Nigerian Government under Gen. Yakubu Gowon was being seduced everyday by the sinister world banking systems into borrowing. At the time Chief Awolowo, warned " ... we fought a civil war without borrowing a penny, during which time Nigeria was spending millions of dollars every day to prosecute the war efforts ...". The suspicious power elite who then were poorly educated and were obviously being misinformed by the officers of the evil world banking systems completely refused to listen. Awo vowed not to be part of it, the war was already over, there was actually little or no more roles for him to play -- the man simply left the government, he went back to his law practice, the year was 1971. This essay is not about Awolowo, it is about the World Bank and the IMF. If you feel you must react to the name "Awolowo", kindly direct all your reactions to him in his grave at Ikene, Ijebu Remo. I have no need for revisionists type email. 

Between 1971 and year 2003, we are told that Nigeria has over 30 billion dollars of foreign debt. Many in Nigeria governments have tried in their own way to find a solution out of the Nigerian huge foreign debt. Various Military governments have implemented one form of debt buy back or another with little or no effect. Many years ago, I had a friend here in the United States, he made his fortunes buy buying bad debts from banks and from the Savings and Loans failures of the 1980s. What my friend did was rather simple he paid a penny (cent) on a dollar of a bad debt and then collected what he could from the debtors. In some cases, he settled for just 60% of the original debt. My friend became very wealthy, and the debtor was free of his/her debt burden. 

I am not particularly familiar with the various debt buy back schemes which Nigeria has implemented since when debt buy back first became popular in the 80s. Nigeria during the Babangida era tried some form of debt buy back schemes. What we do know is that the debt is climbing higher everyday despite billions of dollars which have been paid to service it. It is very clear to the discernible people that someone is obviously ripping Nigeria off. The truth is the greatest financial crime which have been perpetrated on earth was not against the so-called innocent Americans but against the unsuspecting poor people of Nigeria. At least the Americans were dealing with faceless individuals, who send in a email or ordinary mail, in which they told their victims that they were in possession of monies belong to the Federal republic of Nigeria. These victims or were they really? (more like criminal accomplices) were informed to send money and in the end lost their money. The so-called innocent Americans were the ones to blame, because they are knowingly and were willing to commit financial crimes against the innocent people of Nigeria, they should have reported the crimes to the FBI, none of them did, they got burned and they are crying foul. Their government is shamelessly going around intimidating the Nigerian government. Sounds very typical. The strong bully against the weak nation. 

The focus of this essay is the IMF and the World Bank. It is true that they are owed some or a lot of money and are not just looking to collect their debt, they also want to impoverish the people in the process. "That's for starters. In all, the IMF's 167 loan conditions look less like an assistance plan and more like a blueprint for a financial coup d’état. The IMF would say it has no choice. Ecuador is broke, thanks to the implosion of its commercial banks. But how did Ecuador, an OPEC member with resources to spare, end up in such a pickle? For that, we have to turn back to 1983, when the IMF forced its government to take over the soured private debts owed by Ecuador's elite to foreign banks. For this bail-out of US and local financiers, Ecuador borrowed $1.5 billion." wrote Gregory Palast in the London Observer October 8, 2000.

IMF ordered the government of Ecuador, by the 1st. of November. 2000, "...to raise the price of cooking gas by 80 per cent. It must eliminate 26,000 jobs and halve real wages for the remaining workers by 50 per cent in four steps in months specified by the IMF. It must begin to transfer ownership of its biggest water system to foreign operators by July and grant BP's Arco subsidiary the right to build and own an oil pipeline over the Andes. " How is this compared to the Bureau of Public Enterprises programs which is currently taking place now in Nigeria? Perhaps not very different. What the Nigerian government must do is to work out a schedule to pay back its debt in a more honorable way instead of begging for debt forgiveness. Dr. Bankenstein's Monsters: The World Bank, the IMF and the Aliens Who Ate Ecuador. An internal study reveals the price 'rescued' nations pay: dearer essentials, worse poverty and shorter lives. All that the Nigerian Government need to do is to ask our sister Nation to the East, Tanzania. 

IMF and the World Bank have lent a sticky helping hand, more like loan sharking, to scores of nations. In Tanzania, there are 1.4 million people there are getting ready to die. This is about 8 per cent of the nation's population, they have the Aids virus. IMF actually directed the Tanzania Government to charge for hospital visits, which was previously free. The Tanzania Government agreed. The effect cut the number of patients treated in the three big public hospitals in the capital, Dar es Salaam, by 53 per cent. Talking about IMF love for the people, if this does not show where the IMF interests lie, I don't know what will. They did not stop there, IMF also told Tanzania to charge school fees. Now the bank expresses surprise that school enrolment is down from 80 per cent to 66 per cent. Altogether the World Bank and IMF have 157 other helpful suggestions for Tanzania, and the Tanzanian government secretly agreed to adopt them all. It was sign or starve. 

The truth is: No developing nation can borrow hard currency without IMF blessing (except China, whose output grows at 5 per cent a year thanks to it studiously following the reverse of IMF policies). The IMF and World Bank have effectively controlled Tanzania's economy since 1985. Admittedly, when they took charge, they found a socialist nation mired in poverty, disease and debt --- these are what IMF wanted to turn around but see what happened. The so-called IMF experts wasted no time in cutting trade barriers, limiting government subsidies and selling off state industries. This worked wonders they said to themselves. The fact is: According to bank-watcher Nancy Alexander of the Washington-based Globalisation Challenge Initiative, in just 15 years Tanzania's GDP has dropped from $309 to $210 per capita, the literacy rate is falling, and the rate of abject poverty has jumped to 51 per cent of the population. Such is the impoverish hands of the IMF. Now they are blaming their obvious failure in Tanzania on the people. "...yet somehow the bank has failed to win over the hearts and minds of Tanzanians to its free market gameplan. 

Last June, the bank reported in frustration: 'One legacy of socialism is that most people continue to believe the state has a fundamental role in promoting development and providing social services." Everywhere the IMF intervened, they left a giant footprint of a destroyed economy, joblessness, more poverty than when they came in. For example, IMF/World bank began in Argentina many years ago by asking the Argentinean government to start cutting its budgets. Today a fifth of the population of Argentina is unemployed, they said to the government cut the unemployment benefits drastically, take away pension funds, cut the education budgets, they in fact prescribed horrible things for Argentina. No one really knew if the IMF experts realized that: if you cut the economy in the middle of a recession, which was created in the first place by the IMF experts, you are really going to absolutely demolish this nation, that is exactly what IMF did to Argentina. IMF took a reasonably vibrant economy and grounded it to a halt. IMF ruined Argentina’s economy. 

On the other hand, when the United Sates was attacked on September 11, 2001, President Bush came out and said "we got to spend $50 to $100 billion dollars to save our economy". He did not start by cutting the budget, he started trying to save the economy. But they tell other countries they must cut, and cut, and cut. The reason for the strings of mindless cuts is rather simple, it is so the Argentina, Ecuador etc., of the world can make payments to foreign banks - the foreign banks are collecting 21% to 70% interest. This is loansharking. It was so bad that they required Argentina to get rid of the laws against loansharking. This is because any bank it was determined would be a loan-shark under the Argentine law. Another thing that I found about the IMF/World Bank is that, basically they required nations to sign secret agreements, in which they agreed to sell off their key assets, in which they agreed to take economic steps which are really devastating to the nations involved and if they didn't agree to these steps, there was an average for each nation that signed one-hundred and eleven items that they are required to sign on to. Any nation which did follow those steps which were suggested by the IMF were then cut-off from all international borrowing. 

In today Global economy, if a nation cannot borrow any money in the international marketplace. The truth is no one can survive without borrowing, whether you are people (individuals) or corporations or countries - without borrowing money and having some credit and you will simply be stagnated or just rut away. The activity of the IMF/World Bank has been known for years. They come in, pay off politicians to transfer the water systems, the railways, the telephone companies, the nationalized oil companies, gas stations - IMF always operate best with corrupt politicians, who have taken their cut in bribes then hand over national properties to selected IMF/World bank agents for next to nothing. The bribes or they pay off for the corrupt politician/individually, which could be as high as billions a piece are then deposited in Swiss bank accounts. The effect of this is total slavery for the entire population. IMF/World Bank has even gone a notch worse in the case of Venezuela, here you have got an elected president of the government and the IMF announced that they would support a transition government if the president were removed. 

They are not saying that they are going to get involved in politics - they would just support a transition government. What that effectively is, is saying we will pay for the coup d'etat, if the military overthrows the current president, because the current president of Venezuela has said no to the IMF. The President of Venezuela simply told the IMF guys to go packing. IMF in their arrogant style brought their teams in and said to the President of Venezuela, you have to do this and that. And he said, I don't have to do nothing. He said to these gang of thieves: "what I'm going to do is, I'm going to double the taxes on oil corporations because we have a whole lot of oil in Venezuela. And I'm going to double the taxes on oil corporations and then I will have all the money I need for social programs and the government - and we will be a very rich nation". Well, no sooner President Hugo Chavez did that than the IMF agents started fomenting trouble and using the military, the result, Hugo was briefly overthrown and then reinstated when they find the ordinary people rallied to his support. Now they have infiltrated the union to destabilize Venezuela. I am afraid for the worst for the Venezuelan President, if they do not blackmail him out of office, he may end up being shot dead by the agents and domestic cronies of the IMF. 

They are not going to allow him to get away with raising taxes on the oil companies. Now we are seeing the same pattern in Nigeria -- the oil workers are on strike. The truth is, many of these oil workers can not even articulate exactly what it is they are striking for-- they are largely ignorant of the consequences of their action on the Nigerian economy. They are allowing themselves to be used by the Multinational Corporations to undermine the government. In the United States, government workers are not allowed to go on work stoppage as means of addressing low wages or other welfare concerns. If they did they will be fired/dismissed. In August of 1981 Ronald Reagan outraged with the strike by PATCO, he (Reagan) informed the air traffic controller to return to work or the government would assume the striking controllers had quit. By the end of that week over 5,000 PATCO members (Professional Air Traffic Controllers Organization) has received dismissal notices from the FAA. Their offence, they participated in an unlawful strike against the government of the United States. Nigeria (government) must be vigilant to recognize organized terrorism against it. 

It must put in place measures which will make it difficult for anyone, or group, whether local or foreign to commit economic crime against the Nigerian people. But what we are hearing is the madness to host World Cup Soccer, this is a misplaced priority which will not portray Nigeria as serious in its efforts to reduce debt. The people of Nigeria can not eat World Cup Soccer Hosting, the people need jobs which pay livable wages. What Nigeria needs to do is to stop or freeze new spending, at least those that will have little or no impact on the economy. The government must work seriously to pay off the national debt. With the debt paid off, Nigerians will again begin to enjoy a better standard of living such as they had in the period when Chief Awolowo was the Minister of Finance. 

Michael O. Folorunso This article was first published in 2000 on GAMJI.COM